Abstract

With Malaysian government plan to increase production of beef and open the beef market to more abattoirs from other countries, domestic beef market has become more challenging. The domestic beef market is postulated to be available in a variety of qualities in future. Consumers do not only make decisions on how much to purchase but also at what qualities. This study is to analyze consumer evaluation of quality and quantity on demand for beef in Malaysia. A demand model incorporated consumer socio-economic variables and another applied demand analysis incorporated quality variable are estimated via two-stage least squares. Beef demand elasticities are estimated in the first demand model and a quality elasticity of demand for beef is estimated in the second applied demand analysis. The models are applied to a cross-sectional data set from Household Expenditure Survey 2004/2005. The results indicate that beef demand is inelastic to meat expenditure and to its own price. On another side, the results also indicate that beef demand is inelastic to quality. The elasticities in this study suggest that consumers substitute quantity for quality in demand for beef in Malaysia.